surviving the recession

If you are a British mortgage holder, you should always aim to have your mortgage less than the value of your home - if your loan is more than the value of the house (a negative equity situation) and you have to sell the house in a hurry, you will be liable under UK law for the difference in what the sale of your house realises and the mortgage.

Therefore one of the safest things you can do in these times of property price falls is to overpay your mortgage if your contract allows it, to ensure that you always have at least 10% equity in the property. That way, if you lose your job and have to sell in a hurry, or if you simply need to remortgage, you can do so.

But how do you tell if you are in a negative equity situation? You can always get an estate agent to value your house, or you can use this calculator from the Financial Times - FT equity calculator - to check if you have equity in your property. It won’t be exact, but should be a good rough guide as to what your situation is.

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